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Bankruptcy & Workers' Compensation

Question: Why is the trustee keeping my bankruptcy case open when I got a discharge? I have a workers’ compensation claim that my lawyer said will settle soon. And I will get money from the settlement of the comp claim.

I filed workers compensation because I was injured at work. I am a construction worker and I fell and hurt my knees and my back. I couldn’t work for a while so I had to file workers compensation so that I could get some money for me and my family. My wife only works part-time at a nail salon in Cumming, Georgia, so we needed money.

I have been honest with the trustee and the bankruptcy court. I told everyone about the workers’ compensation case and I didn’t try to hide anything.

I did some online research myself and I am confused about the difference between a “discharge” and the “closing of the case.”

Please walk me through how workers compensation and bankruptcy work?

M.R. in Alpharetta, Georgia

Answer: Your bankruptcy case can be discharged, but not closed. If there is an outstanding claim for worker's compensation, a bankruptcy trustee may not want to close the case. It sounds like your trustee kept your case open pending the workers’ compensation decision, which he is required to do by the bankruptcy law.

The trustee usually reviews the situation and then a bankruptcy attorney we will make arguments concerning the amount that you should be able retain, but that decision, here in the Northern District of Georgia, is up to the judge and trustee to decide.

The fact that you have been honest and forthright throughout this process will certainly help you. If you had not been honest, the trustee would have been able to keep it all to pay your creditors no matter what the law says.

Please be careful about research online as there is a lot of misinformation on the internet and every case is not the same. Some information on the internet uses the terms "discharge" and "closing of the case" synonymously. But that is wrong. A trustee can most certainly seize assets after a discharge order has been issued, as long as the case remains open.

It appears that a discharge was granted because you did everything that you are supposed to do for a bankruptcy case. The case remains open, however, due to the possibility of assets being available for your creditors.

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